Foreign Market Expansion Of The Business Organizations - Samples

Question: Discuss about the Foreign Market Expansion Of The Business Organizations. Answer: Introduction The purpose of the following paper is to focus on the manufacturing process in Bangladesh. This has been regarded as one of the most notable economic powers in Asia and they have developed their position in a big way. The discussion has to be made by following the given scenario of the organization that has been selected. It has been noted in the recent years that the manufacturing prices have been increasing in a great deal in the developed countries. This is due to the fact that the laborers want more wages for their efforts. Their demands are higher from different angles.The laborers are much educated and they know about the wages that are being paid all over the world and the standard wage levels along with the standard working hours for the laborers. If the manufacturing company cannot provide the proper wages and make the laborers work for that particular working hours only, the workers will not agree to work for them (Chen and Sandino 2012). On the other hand, the manufacturin g companies will want to get the most amounts of works within a certain point of time by investing lesser amount of money. This given scenario concerns around the Fashion Universe that was founded in 1970 in Australia. This company manufactures clothing labels with the retail stores. The headquarter of the company is located at Brisbane. They sell their merchandise all over Australia in almost all the capital cities. They have built a pretty strong brand reputation for themselves (Roper and Fill 2012). The price to which they have been able to keep their brands is $40 to $399 in Australian dollars. The problem has arisen that the management of the company is very much worried about the rising of the costs of manufacture and they have selected Bangladesh where they want to manufacture their products. Global economy and rising of production costs The production costs of the products have been rising all over the world and almost all the industries. The demand curve is one of the most important things in this context. The cost figures have to be displayed by the business companies and discussed over the meetings (Buera and Kaboski 2012). This organization fashion universe has to decide upon the retail prices of the products. The cost price of the wholesale buyers and the manufacturers has to be compared and at one point of time, the cost price needs to justify the sustainable profit the manufacturer will make. If this profit is not made, the manufacturer will face losses and Fashion Universe has been going through the same thing (Buera and Kaboski 2012). They are not being able to meet the organizational objectives in terms of their production and make profits for the organization. The thing that hinders them is the rising prices for buying the key elements and the raw materials for the product. Strategic planning The business owners have to make the strategic decisions if they want to make the most profits. In this case, the owners of Fashion Universe are not being able to incur the profits because most of their income is being spent behind buying the raw materials for the production process (Barney 2014). They are not being able to supply the proper amount of goods to their customers that is affecting them in their business figures. The only way to combat this situation is to outsource their manufacturing to other countries. The supply levels have to be increased and this can be done only through shifting the production to another country. Economy of Bangladesh In the given scenario, the company Fashion Universe will be looking to shift their manufacturing process to Bangladesh. This country is considered to be one of the rising economies in Asian continent and they are preparing to become one of the strongest ones (Lewis 2013). In the present business context, they will be looking to invest their capital in that country just because they will be able to get the cheap labor there. They will also be able to make the laborers work more than the working hours in Bangladesh than in Australia itself. The laborers are also not as much educated as the Australian ones (Lewis 2013). It has been noticed in the past years that the economic development has been sometimes steady and sometimes threatening as the country is under a fragile rule of law. The problems in that country are related to the fact that the economic management in that country is not always up to the mark and sometimes very poor. The per capita income of that country is $3.607 and the GDP of the country is about $576.5. It has an economic growth around 6.4%. The economy is very much informal and it is driven by the poor political condition and corruption within the country. The economic dynamism is also very much responsible for this as well (Wiens and Jackson 2015). These things are very critical for the company as they have to develop some strategies to confront this situation and export their manufacturing process. The Bangladesh economy has been suffering from many setbacks in the recent years. The Australian company Fashion Universe investors will help the Bangladesh economy to improve on certain grounds. This will be very helpful for both the sides (McNerney, Fath and Silverberg 2013). The Fashion Universe can capitalize on this by getting their work done by investing less money but getting the production done within a certain period of time and on the other hand, the Bangladeshi economy will be re-energized. Most people in Bangladesh do not have any particular or permanent profession. Either they invest their time in agriculture or they do part time professions. Most of the money from the Bangladesh government comes from tourism and agriculture. The need for income is an evident thing for the Bangladeshi people (Islam 2012). Fashion Univer se can get a big market in the neighboring countries of Bangladesh like India, China,. Sri Lanka, Malaysia and others. Market entry mode If Fashion Universe tries to get into the market of Bangladesh and produce their goods there and then again export it back to Brisbane, they have to apply the different market entry modes (Grnig and Morschett 2012). These market entry modes are indeed vital for every organization. The Fashion universe organization has targeted the vast population of the Asian contingent and they will look to utilize this opportunity in the best way. The management is concerned about the production of the goods in Australia and they will be very jubilant when they grab this opportunity. The market of India and China is the largest in Asia. In Bangladesh, the laborers will agree to work on a lower wage because they have to feed their families. There are different types of market entry modes. They are exporting, licensing, joint venture and direct investment (Grnig and Morschett 2012). Exporting Exporting is the way or the strategy in which goods are produced in another country by exporting the manufacturing process and machines there. Exporting is one of the most traditional and conventional way to reach the foreign markets (Fabling and Sanderson 2013). It does not require the goods to be produced in that particular country so the need for foreign production facilities is not required by the organization. In this case, Fashion Universe will be implementing this same strategy as well because they are rest assured that they do not have to take the help of the production facilities of Bangladesh. The most of the investments that are required in this case is related with the marketing expenses of the company (Fabling and Sanderson 2013). This process of exporting can take place only when four types of players are present in the process. These four players are exporters, importers, transport providers and the local Government. Business environments Apart from the focusing on, it is of utmost importance for Fashion universe to focus on the business environments for understanding the business context over there and the business culture of that particular country (Pulver 2012). The business environments include the internal environments and external environments. These things are the measure sticks for any company to understand how they will be operating in a different countries and what things they need to concentrate on. Internal business environment When the internal business environment of an organization is analyzed, the need to evaluate the strengths, weaknesses, opportunities and threats of the organization along with the organizational culture of the company is very much significant. In this case, the SWOT analysis of Fashion universe has to be done as well (Kuratko, Hornsby and Covin 2014) Strengths The policies of the Fashion universe are very customer friendly so it will help them to gain a wide range market in Bangladesh (Grant 2016). The brand recognition of Fashion Universe is quite strong so they need to focus on gain a better customer group under their disposal by using this brand recognition (Huang and Sarigll 2014). The designers who work for the company are much innovative and their innovativeness will drive the organization to be a popular one among their rivals. They produce their clothing apparels at such a price range that the middle calss buyers will also be able to avail them (Grant 2016). The potential customers will have to be targeted by using their customer profile and Fashion Universe is an expert in these things. Weaknesses Fashion Universe sometimes puts in some unnecessary costs that hinder the average or low income buyers to buy their apparels. Their presence in Asian continent is not much known so they will have some primary problems before kick starting their business effectively (Grant 2016). They have appointed some inexperienced designers in their retail branches in the past that has affected their business in great ways. Opportunities The area in which they are planning to operate is very much open to the activity of retail stores as there are not much retail stores in Bangladesh. Raw materials will be very easily available with a cheap labor force. So Fashion Universe will have large opportunities to spread its business (Grant 2016). The loosened commercial restrictions of Bangladesh will add to the benefits for Fashion Universe. They can use the technological advancement in Bangladesh that will give advantage to their operations as well as improve the economy of Bangladesh. Threats Internal politics is one of the major threats for Fashion Universe because the current political condition of Bangladesh is not proper enough to start a new business (Trimi and Berbegal-Mirabent 2012). The struggling economy will be a threat to gain the expected support from the Bangladesh government. If the political problems and movements continue to grow, it will be extremely difficult for the Fashion Universe to get the raw material supply within a certain point of time. External business environments The main component of the external environment of a business is to discuss about different aspects that have to be analyzed in the PESTEL analysis (Gupta 2013). Political factors The political condition at Bangladesh at present is not stable enough so that Fashion Universe can make a sustainable entry at the moment. However, they can expand there in spite of these uncertainties because they will be able to get the support of the Australian Government by mutual settlements. As this is potentially a huge market they cannot ignore this market at all. The political unrests will stop at one point of time and they must wait for that. As this is a democratic country, the conditions will surely to be improved (Gupta 2013). Economic factors The Bangladeshi economy is going through a crisis period and the claws of global inflation are looming large on the trade industry. There is corruption all over the country and the poor people die of hunger and suffer from malnutrition. In this scenario, Fashion Universe should be investing in Bangladesh however critical the scenario is because this will help to improve the economic condition of the country. They can perform their CSR activities to a new level that will be able to transcend the economic barriers and strengthen the economy (Lee, Park and Lee 2013). Social factors Bangladesh is by far a Muslim dominated country by majority and they are divided between certain social classes mainly based on their income levels. Fashion Universe should aim to launch some customer-friendly design with a range that can be affordable by their potential customers of all classes. People in the country are not much educated so Fashion Universe can launch some academic programs for the poor people as part of their CSR activity (Lee, Park and Lee 2013). Technological factors The technological factors have to be utilized in the country of Bangladesh because they are not much accustomed to the technologically advanced. One thing Fashion Universe can do is to introduce the new technological advancement tools in the Bangladesh market and be the pioneering organization to sell their products through the help of technology. They can introduce the digital payment options and the ways they can improve the system is to make the customers avail their products through online marketing via mobile apps. Environmental factors The various environmental factors including the climatic features and effect of the cyclones that affect the country very often have to be kept in mind by Fashion Universe. They must set up their retail marketing outlets at such places where the urban population can avail their fashion accessories (Czinkota and Ronkainen 2013). This will be very helpful for them. They should also set up a good logistics supply chain network by which they can dispatch the apparels purchased online to the shipping addresses. Choosing the right location is a very important matter in this aspect. Legal factors The legal factors are very important in the case of Fashion Universe as of any organization who is expanding their business into a foreign country (Erdo?mu? and Cicek 2012). All the legal frameworks regarding business expansions should be maintained by Fashion Universe so that they will not be facing any legal hazards in the coming times. The local employees will have to be paid according to the law if they are hired (Erdo?mu? and Cicek 2012). Social media marketing Another important aspect in the marketing of Fashion Universe is to segment their target markets and appeal to them by using the social media (Tuten and Solomon 2014). As social media is a very popular aspect among the young generation and they are quite aware of the popular fashion trends in the recent times, they can be targeted in the urban areas of the country. Thus, Fashion universe will be able to gain the support of the young community by being hugely present in the social media platforms and connecting to their target audience. Conclusion This paper can be concluded by saying that as Fashion Universe has been a successful fashion retail brand in Australia; they will be quite interested to expand their business in Bangladesh as this is a very populous and emerging country in the global sphere. There may be some primary obstacles and barriers for them to shift their business, they have to concentrate on the various market entry modes. The political and economic barriers are there as well. These barriers have to be overcome by segmenting their target market to the young generation of the country and using the social media as a special weapon to attract them toward their organization. They have to analyze their strengths and weaknesses in this context as well because as it will help them to show their strong presence in the Bangladesh market with an effective strategic planning. References Barney, J.B., 2014.Gaining and sustaining competitive advantage. Pearson Higher Ed. Buera, F.J. and Kaboski, J., 2012. The rise of the service economy.The American Economic Review,102(6), pp.2540-2569. Chen, C.X. and Sandino, T., 2012. Can wages buy honesty? The relationship between relative wages and employee theft.Journal of Accounting Research,50(4), pp.967-1000. Czinkota, M.R. and Ronkainen, I.A., 2013.International marketing. Cengage Learning. Erdo?mu?, ?.E. and Cicek, M., 2012. 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